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US Trade Commission Looking into 3D Imaging Trade Secret Theft

by Chris Brook on Thursday August 19, 2021

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One firm claims another took its trade secrets and brought them to China to manufacture the product at a lower cost.

Few industries have matured as quickly as the 3D printing and imaging world over the last 20 years. Regardless of what's being produced, companies in this line of work have no shortage of assets, especially when it comes to the highly technical components of equipment used to manufacture the products.

These trade secrets are their crown jewels; costly to develop and sometimes priceless if jeopardized.

The United States International Trade Commission announced earlier this month its looking into a complaint it received that alleges one tech firm stole another tech firm's trade secrets, valuable information that's used for real time 3D mapping and imaging.

While independent, the ITC is part of the U.S. federal government - it calls itself a quasi-judicial federal agency on its website - responsible for looking into trade issues, competitiveness, and complaints, like this one.

In a complaint filed with the ITC on July 2, Criterion Technology, a plastics manufacturer that specializes in optical molded domes - think of the clear plastic domes you see over security cameras – claims Velodyne Lidar, a Silicon Valley lidar - light detection and ranging radar sensor - company, misappropriated some of its data.

The ITC’s investigation is centered around the possibility Velodyne's actions violate section 337 of the Tariff Act, which deals with unfair trade or competition in importation.

In the complaint, Criterion said it began working with Velodyne back in 2016 on ways to make its “Puck” lidar sensors more efficient and last longer. To help, Criterion reportedly shared trade secrets related to optical polycarbonate and nylon-based enclosures that protect the internal lidar sensor.

Sensors like these find their way into self-driving cars, surveying equipment, and drone mapping software. Velodyne’s "Puck," introduced in 2014, cost around $8,000 but now you can buy one for around $1,000 on eBay.

Instead of entering into an arrangement with Criterion, the company claims Velodyne transferred those trade secrets to a manufacturer in China - the complaint names them, Fujian Fran Optics - to manufacturer the optical enclosures at a lower cost.

Criterion claims the two companies "misappropriated Criterion’s trade secrets while Criterion was developing a higher-quality optical-grade plastic enclosure for use in Velodyne’s LiDAR pucks," trade secrets that "enabled increased transmissivity and the use of a durable optical hard coating on the exterior of the lenses."

According to the complaint, Criterion had confidentiality notices, NDAs (non-disclosure agreements) and forms of data protection in place but they still weren't enough to keep Velodyne from allegedly misappropriating their trade secrets.

Designs and specifications for the optical enclosures, accessible under NDA, originally referenced in email correspondence between the two parties eventually found their way into tools and designs used by Velodyne, the complaint alleges.

“Comparison between Velodyne’s 2016 part design specifications and Velodyne’s subsequent 2018 part design specifications clearly shows that Velodyne adopted Criterion’s trade secret part design  specifications as its own after engaging with Criterion,” the document reads.

For its part, Velodyne told Seeking Alpha in July that it was still reviewing the claims but that it was ready to fight them.

"As a leading technology innovator, Velodyne Lidar’s unique intellectual property has driven our industry-leading advances for over a decade. We are in the early stages of assessing Criterion’s claims, however we believe the claims have no merit and intend to defend ourselves vigorously,” a spokesperson told the publication.

Following ITC's investigation, Criterion is asking for a limited exclusion order and a cease and desist order, steps that would effectively block the import of Velodyne products including Alpha Prime, Ultra Puck, Puck, Puck Lite, Puck Hi-Res, and Veladome into the U.S.

Tags:  IP theft

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